In the tech world you’ll often hear about companies focusing on innovation and one way to describe this is by using the S-Curve idea.
Imagine the letter S like the one in the image below.
The idea is that a company comes up with an idea, a product or a service of some sort. It invests resources, people, time and costs to see if the idea floats. This is represented by the downward arrow at the bottom of the S.
As they gain traction, customers, investment or sales they start to ascend the S. It becomes a product line, service, or company offering. They gain more traction and grow. This period could be months, or weeks, or years.
At some point though the market for that product or service saturates. The competition moves in or customer demand shifts, or people just move on. This is represented at the top of the S where demand drops.
For some companies this is the end of their business. For others, it’s just one product stream (which might be their most profitable). Some companies can struggle on for years in a downward market, some are wiped out quickly.
The best companies invest during the boom time though – looking for that next product, service or business that will take off and sustain another S. Maybe just as the first product is fizzling out, or at the same time, or during the decline.
The very best companies are experimenting, testing and trialling new ideas. Some just tweak existing products to create more diversity in features, some create new platforms and for some it could be entire new business models or products. Everyone is chasing the customer demand and it might not always lead to shiny tech. Remember – those who own the customer demand win – not those with the shiniest tech. A hard lesson for many technologists.
Look at any of your favourite tech companies and you’ll see this in action. Google often kill products if they don’t perform. Amazon doesn’t stick to just retail markets – look at how successful AWS has been.
There is no right or wrong way to innovate and find that next S, you just have to be doing it. At some point your market may disappear – what next? It might be too late to innovate and find a new product or service at this point.
Innovation and renewal takes time. This is exactly why companies invest in multiple new products, ideas or strategies to see which ones takes off and creates the next S curve. Another S running at the same time, or slightly overlapping the last S keeps them alive.
I saw a talk at Dublin Tech Summit that suggested tech companies should be running between 5-15 new initiatives. From these only one will likely take off. Is your company running this many? Or simply relying on a single core offering?
You cannot innovate out of decline though – Jim Collins teaches us this lesson in How The Mighty Fall. Some companies go in to decline despite having lots of innovations, but the reason is most likely because they innovated too late, and the innovations weren’t good enough to sustain the next period of growth.
What’s this got to do with you and management? A few things:
- If you’re in tech and your company are not experimenting and innovating you’ll be bypassed at some point.
- It’s your responsibility to speak to product teams, execs etc and encourage them to try new innovations. It can be harder than it seems to convince short term thinking though.
- What would happen if your company’s market dried up? I’ve seen this first hand. It’s not pretty.
- Innovation is a buzz word yet few people know how to actually stir it up.
- Your job, as a manager, is to create a safe place for people to experiment, encourage the mixing of ideas and move people around (strategically) to create sparks of innovation. I’ll be writing more about how to do this.
- Innovation is a creative process.
- This cannot be achieved by measuring costs, controlling people or trying to get more from less. Managers must fight this illusion of control and productivity, and create places for innovation to happen.
- But be aware that constraints can lead to great innovations. Balance is needed. Constraints, but not micromanagement control.
Most importantly though – you should be applying this concept to your own career.
Are your current skills in decline as the market shifts and the competition increases?
We must keep adding new skills and experiences to remain relevant to the next wave of demand from employees and customers alike.
This might be coding skills, new tech, better communication skills or shifting to a whole new sector.
This is why I moved from Tester, to Agile Coach, to Engineering Manager, to HR. HR is going through change now. A perfect sector to gain experience in. I’m able to work across all of those industries and lead these sorts of teams. Your path will be different, but think about where your industry is going and what your peers are doing and what interests you.
Should you be finding your next experiment or innovation to create a new S-curve for your own career?
I think so.